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Bain ‘Ashamed’ of Serious Mistakes Made With South Africa Work
(Bloomberg) -- Bain & Co. said it’s “ashamed” of the consultancy’s role in destabilizing South Africa’s tax agency after the country’s most senior treasury official called for companies to stop doing business with the firm.
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The public apology by Stephen York, Bain’s managing partner in South Africa, comes days after the UK banned the group from bidding for state contracts because of its links to corruption in the African nation under the presidency of Jacob Zuma.
Bain was found by the country’s judicial commission to have had ties to illegal dealings during work restructuring the South African Revenue Service, where senior staff were ousted and the institution’s investigative capacity was gutted.
“We apologize to you,” York said in a full-page advert in finance newspaper Business Day on Friday. “Bain made serious mistakes in the procurement and execution of our work at SARS.”
While regaining the South African people’s trust “will not be easy,” he said, “we hope you will give us the opportunity to do so.” He went on to say he wants the country to thrive.
The comments come after Ismail Momoniat, the acting director general of the Treasury, called for a halt to business with Bain and urged the country’s government institutions to investigate.
“In my view, what Bain has committed is what I consider to be treason against South Africa,” Momoniat told SAFM radio last week. “Why can’t we move fast to blacklist companies like Bain?”
York said much of what has been said about Bain is untrue -- the company has denied being complicit in corruption -- but the firm is “accountable for its mistakes.” He said he regrets “playing any role in the damage to this critical institution.”
Bain is one of a number of international companies that have acknowledged playing a role in misconduct at state companies during Zuma’s rule, during which funds were funneled out to private entities in a practice known locally as state capture. McKinsey & Co., SAP SE, KPMG LLP and ABB Ltd. have all accepted responsibility for improper work and in some cases paid back earnings.
Zuma has denied wrongdoing.
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